Financing and Selling a Film 

 

The GlobalWatch model is simple. For each film project, we establish a new limited company to act as a Single Purpose Vehicle (SPV) to develop, produce and sell the rights to that specific film.

 

This allows our investors to take full advantage of the UK Government’s Seed Enterprise Investment Scheme (SEIS) as well as potentially from the Enterprise Investment Scheme (EIS) further into the project. In addition, each film is registered with the British Film Institute as a British film, allowing the SPV to claim up to 16% of its production budget back from HMRC through the Film Tax Credit (FTC) at the end of each financial year.

 

The SPV will raise funds to finance the development, production, post-production and sales costs of PARTY PIECES. With a budget in the region of £750,000, financing PARTY PIECES will involve investment from a diverse range of sources including:

 

• Private investors via tax relief schemes such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS)

• Cashflowing the UK Government tax relief for the SPV, namely the Film Tax Credit (FTC), through a third party financier

• Pre-sales via an international sales agent to UK and/or foreign distributor(s), advancing a reduced purchase price for the rights to specific territories and media to meet production costs

 

GlobalWatch would expect to utilise all of the above in the financing of PARTY PIECES, starting with the SEIS for initial investors.

 

Films generate sales income from the licensing of rights to distributors to release them in particular countries in cinemas, on DVD/Blu-ray and/or on television, plus any other commercial tie-ins. There will often be a pre-sale or an initial Minimum Guarantee payment, like a book publisher’s advance to an author, which can be used to fund part of the production or post-production costs of the film, followed by a profit share with distributors if the film is successful. However the film will still be owned by the SPV and will continue to generate income throughout its initial lifecycle and beyond.